Submitted by Fox First at Ten on July 20th
NEW YORK (AP) - Shares of security software company Palo Alto Networks Inc. are shooting higher in their first day of trading on the New York Stock Exchange Friday.
The Santa Clara, Calif. company is going public as the market for IPOs comes back to life following a five-week freeze. Demand for shares of newly public companies had collapsed as worries about slowing global growth and sliding stock markets exacerbated disappointment following Facebook's IPO in May.
But not every company is making it to market. Fender, maker of guitars played by Jimi Hendrix and Eric Clapton, called off its IPO Thursday night. The company blamed poor market conditions and the weakening economy in Europe.
Palo Alto Networks and its shareholders raised $260.4 million in its initial public offering of stock Thursday night. The company's shares priced at $42 each, above the expected range of $38 and $40 per share. That indicates investor demand was heavy. The company had initially expected a price of $34 to $37 per share.
Palo Alto Networks sold 4.7 million and early stockholders 1.5 million. The company, which isn't profitable, plans to use proceeds for general purposes, such as sales and marketing, developing products and possibly acquisitions. It won't receive any proceeds from shares sold by stockholders.
The banks managing the IPO may be another 930,000 shares to sell if there's heavy demand for the stock.
In 2011 Palo Alto recorded a loss of $12.5 million on revenue of $118.6 million. The year before it lost $21.1 million and had $48.8 million in revenue.
Shares under the "PANW" ticker symbol are up $14.95, or 36 percent, to $56.95 in morning trading.
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